Driven to Win vs. “Fear of Failure”

The age-old debate about what fuels a startup’s success is whether they are “driven to win” or have a “fear of failure”. In this lesson, we are going to try and resolve this question once and for all.

I think both sides of this argument are pretty self-explanatory, but let’s just make sure we are clear on what we are talking about here. Being “driven to win” is an insatiable desire to be #1 in your industry, often with a “take no prisoners” mindset of growing market share as quickly as possible. The CEOs of these types of businesses often have a deep disliking of their competitors, and see themselves in a “all-out sprint” against the CEO’s of others in their space. On the other hand, “fear of failure” is driven more by not wanting the company to go out of business, and the perceived negative impact that would have on the CEO’s resume and reputation. To me, the former feels more akin to an “offensive” strategy, and the latter feels more like a “defensive” strategy.

So, if that is in fact a good analogy, are you aware of any competition that doesn’t require the proper balance of both a good offense and a good defense? I really think if you have too much of one, without the other, your success will be hampered. As one example from the sports world, do we all remember the failed Rich Rodriguez tenure as head coach of Michigan Football between 2008-2010? His innovative offense broke every statistical record, as the most productive offense in the 132-year history of this storied program. At the same time, his lack of defensive focus, broke every statistical record in the wrong direction, as the worst program in the history of Michigan football. This lop-sided mix of skills resulted in a middle-of-the-road record (7-6 in 2010), and the ultimate firing of Rich Rodriguez at the end of that season.

This analogy holds true in the business world as well. All offense and no defense can cripple your company. If you are too scared to fail (e.g, too much defense), that may cripple your ability to innovate out-of-the-box ideas, that if successful, would catapult your business to new heights never before possible. Let’s use Apple as an example. What if Steve Jobs had stayed “defensive”, focusing on protecting Apple’s market share as the leader in personal computers. We would have never seen such great innovations as the iPod, iTunes, iPhone and iPad that revolutionalized the tech scene in the years that followed, fueling Apple’s meteoric growth and stock price. On the flip side, if you try to use too much “offense”, you can cripple your business by growing too quickly, running out of cash, or entering more markets than logically makes sense for your phase of development, stretching your limited resources too thinly to be sustainable.

I think this theory holds true from my personal experience while CEO of iExplore. I was equally focused on “offense” and “defense”. I was deeply driven to win market share and partnerships away from my competitors at the time, like Away.com, Gorp.com and AdventureSeek. I wasn’t going to rest until we had the largest website and most strategic partnerships locked up. While, at the same time, I had a deep fear of failing, especially in the wake of 9/11/2001 and the negative impact that had on the travel industry. I wasn’t going to let Osama Bin Laden end my dream or taint my track record, and I fought on through very difficult market conditions, even though the odds of success were not in my favor. Without the “offense”, we would have never built up a #1 market position and partnerships with National Geographic, Travel Channel, Expedia, Travelocity, Lonely Planet, Fodors, Frommers, Conde Nast and others. And, without the “defense”, it would have been a lot easier to simply file for bankruptcy in 2001, given the uphill battle that laid ahead.

So, it is not whether you are “driven to win” or have a “fear of failure”. To me, startup success needs an equal balance of both, for “offense” and “defense”.

I guess the old adage, “the best defense is a good offense” could be leading a lot of people into the danger zone that they are talking about. It is funny that all the big name tech businesses seem like they are all offense based, and people just assume that the 80%+ fail rate across start-ups is just business as usual. If they actually spend some resources improving their defense we could probably see that fail rate decrease substantially.

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